How Does Lyft Work?

Ever wondered how much ridesharing companies like Uber and Lyft work? Or how much their drivers get paid? We’ve got all the answers in today’s post on app-based ridesharing company Lyft.

Lyft is the app-based ridesharing platform that is making huge inroads on the well known Uber’s market share.

Lyft is the kryptonite to Uber’s Superman, and it’s forcing the ridesharing juggernaut to be more honest and competitively priced than ever before.

So how exactly does Lyft work? How much does it cost? How much do the drivers get paid? What are the driver requirements?

We answer all these questions and more in today’s Know More Stuff article.

How to use Lyft

Lyft works in an almost identical way to Uber. It uses the principle of ridesharing, which is where you are matched to a nearby driver who will take you to your intended destination.

This is all achieved using the Lyft smartphone app. Here lies the simplicity of the whole process that has seen app-based ridesharing become a major competitor for traditional taxi services.

The app is light (less than 20 megabytes) and is downloaded and installed from the Google Play Store or Apple Store in less than a minute. The next step is setting up an account, which is very quick and easy.

After entering your phone number and the keying confirmation code that is immediately sent to you, all that is left is to enter your name and payment details. I use Paypal but you can also enter your card details. The whole registration process is really easy and it took me all of 2 minutes.

Now with your account registered, you’re ready to get your first ride.

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The app shows a top-down map view of your local area, just like Google Maps.

Here you can select to be picked up at your current location, or by touching an area on the map (or entering an address) you can select another pick-up point.

With your pick-up arranged, the next stage is to choose the type of car that you want to ride in. There are currently 4 Lyft ride tiers:

  • Line – The cheapest tier. You’re matched with another customer that’s headed in the same direction, so be prepared to share. It’s not currently available in all cities.
  • Lyft – This is the standard tier that has space for up to 4 people in total.
  • Plus – This tier provides a bigger ride and has room for up to 6 passengers.
  • Premier – This is the luxury tier that provides a stylish 4 seater.

Now, each of these options varies in price so choose wisely.

With the style of ride selected you can set your destination. This is done in the same way as setting your pick-up point. The Lyft app will then give an estimated cost for your journey.

With all the information input into the app, it will then match you with a nearby Lyft driver. You are provided with a name and photograph of the driver, as well as a picture of their car and the license plate.

Upon reaching your destination, the app requires you to rate the driver (from 1 to 5) and then submit payment. Payment is all done through your Lyft app and there is no cash option.

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The benefits of ridesharing apps like Lyft and Uber

These new apps have changed the way we travel, but what’s the big deal? In this section, we break down the facts.

  • It’s cheaper than a taxi. This is the big one and why companies like Uber and Lyft have seen such growth. They operate at a fraction of the overheads of traditional taxi companies. Fares can be as much as 50% less in some cases.
  • The cars are usually nicer than conventional cabs. This point is especially true if you choose one of the luxury ride options.
  • The “invisible” payment system of everything being app based is just so convenient. Press, press, done.
  • Since the drivers are continuously rated, they are incentivized to be safe, polite, and prompt. If a driver falls below a certain rating, they are deactivated. This kind of accountability drives great customer service.

Lyft Requirements

Ever wondered what it takes to become a Lyft driver? In this section we outline both the Lyft driver requirements and the car requirements for the wannabe driver.

Lyft Driver Requirements

  1. You must be of at least 21 years of age.
  2. You must have had an active U.S. driving license for at least 1 year.
  3. You must pass a driving background check.
    1. This check is done through a 3rd party company.
      1. Potential flags are:
        1. Three or more moving violations in the past 3 years (these include traffic light violations and accidents).
        2. Any major violation within the last three years.
        3. Any DUI or related crime in the past 7 years.
        4. Any driving related conviction in the last 7 years (including hit-and-runs and felonies with a vehicle)
  4. You must pass a criminal background check.
    1. Potential flags are:
      1. Felonies
      2. Drug related crimes
      3. Sexual offenses
      4. Theft
      5. Violent crimes
  5. Additional city or state requirements may come into play depending on where you live.

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Lyft Car Requirements

Lyft have pretty high standards when it comes to the cars you’re allowed to use, but you don’t need to drive a Maserati.

In some case, your vehicle will need to be inspected. These are the standard Lyft car requirements:


  1. Each state has a vehicle age limit. You can find out what yours is in the application.
  2. Doors
    1. A Lyft car must have 4 doors.
    2. It must be possible to open and close all four doors from the inside and outside.
    3. The passengers must be able to open and close the doors themselves.
  3. Suspension/Brakes/Engine
    1. Must be fully functional and in good working order.
  4. Lights
    1. All lights must work. This includes:
      1. Headlights on high and low beam
      2. Indicators for the side, front and rear
      3. Brake lights
      4. Both reversing lights
  5. Body
    1. There should be no dents or damage.
  6. Tires
    1. Should have decent tread. They should pass the ‘penny test’ (see image below).
  7. Windows & Mirrors
    1. The windshield should have no large cracks.
    2. The windshield should have no cracks in the driver’s field of view.
    3. The windows must be fully functional with no cracks.
    4. The mirrors should have no cracks.
  8. Wipers & Horn
    1. Both should be fully functional
  9. Seat Controls
    1. The front passenger seat should be able to move forward and backward.
  10. Muffler and Tailpipe
    1. The exhaust system should meet basic standards and not be modified.
  11. Air Con and Heating
    1. Both should be fully working

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These Lyft requirements are taken from the official website.

A fairly new vehicle should meet the Lyft car requirements no problem.

How much do Lyft drivers make?

Well according to recent reports, not that much. A paper published by MIT, where over 1,100 drivers were surveyed, suggests that the average profit is $3.37 per hour before taxes.

According to the results, the average driver earns $0.59 per mile, but keeps just $0.29 once deductions are made for gas, repairs and insurance.

But the pay levels are anything but constant, and rideshare drivers can make significantly more money depending on things like demand, time of day, and hours worked.

An Uber spokesperson actually trashed the MIT report by saying the “…findings are deeply flawed”, while a Lyft spokesperson said that “an initial review shows some questionable assumptions.” This was reported in a recent Guardian article.

The findings from MIT certainly go against previous studies that suggest pay can be significantly more than they report. In fact, a 2017 survey found that Uber drivers earn as much as $15.68 per hour on average.

Lyft drivers do even better with $17.50 the average reported hourly rate. It should be noted that these figures don’t take expenses into consideration.

A study reported by Buzzfeed also suggests earnings are better. It found that drivers in the Denver area earned more than $13 per hour after expenses.

I guess this means the answer to the question”How much do Lyft drivers make?” is anything but straightforward to answer. There are so many variables that affect earnings, which make results fluctuate wildly.

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How much does Lyft pay?

Lyft pay their drivers according to 3 key factors. The components that a fare is calculated on are:

Basic Fare – This is the amount that the customer/passenger pays to start the journey.

Fare per Mile  – This is the amount the driver earns per mile for a particular region. This amount varies depending on your location.

Fare per Minute – This what the driver earns for each minute the journey lasts. The amount is again region dependent.

The passenger can also incur extra charges for airport pick-up/drop-off.

Lyft also pay extra during ‘Prime Time’ hours. These are times when the demand is greater than the number of local Lyft cars on the road. During these hours, drivers can earn 50% more.

There’s also something called a ‘Power Driver Bonus’ that goes to drivers that meet certain performance criteria.

The driver sees 75% of the total fare price. The remaining 25% is kept by Lyft. Lyft calls this a service fee and a platform fee.

The platform fee is a variable cost, while the service fee is fixed.

It should be noted that passengers are free to tip their driver, and the tip is free from any charges.

As we saw in the last section, it’s really hard to get an accurate number for how much Lyft pays drivers. It’s really dependent on the amount you work, when you work, where you work, and the demand for work.

Some more frequently asked questions

How does Lyft pay drivers?

Lyft pays directly into your bank account once you’ve submitted your details and tax information.

When does Lyft pay?

Lyft does transfers every Tuesday. They should show in your account by the end of the week.

How does Lyft payment work?

The Lyft working week goes from Monday morning to Sunday night. You receive a weekly summary that breaks down your payment. This is sent out every Tuesday morning.

Any payment made through the app is included. This includes tips, referrals, bonuses and weekly guarantees. The payment is made through an ACH transfer that goes directly into your account.

That brings us to the end of our ultimate guide to Lyft. We hope we’ve given you the answers you came here for.

Do you drive for Lyft? What do you think about its service? Get involved in the comments down below!

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Until next post, see ya!

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